Incident description The 2013 report disclosed by Hefei Urban Construction showed that the company achieved revenue of 1,575 billion yuan, an increase of 30.14% year on year; net profit (after deduction) belonging to shareholders of listed companies was 155 million yuan, up 4.73% year on year; basic earnings per share were 0.49 yuan, up 2.08% year on year. Incident Review's revenue is growing steadily, and we are optimistic about 14-year performance. The company's revenue growth rate of 30% in 2013 was basically in line with expectations. However, due to a sharp increase in costs, promotion expenses, and after-sales maintenance expenses for main settlement projects, operating costs and sales expenses increased by 42% and 45%, respectively, which ultimately dragged down performance. The company's sales increased dramatically in 13 years, with sales and sales area increasing by 71% and 78% respectively; in addition, the company increased its project expansion efforts, added 343 acres of land reserves in 2013, and completed 1.33 million square meters of planning design and 770,000 square meters of construction design. We are optimistic about the company's sales and settlement performance in 14 years. Increased leverage ratio and stable cash flow. The company took the initiative to increase financial leverage in '13, adding 4 large loans of 100 million yuan or more, to a total of 700 million yuan. Although the company's leverage ratio has increased, the current balance of short-term loans and long-term bonds maturing within one year is zero, so there is little pressure to repay debts. Furthermore, benefiting from the good performance of the sales side in '13, the company's advance accounts and cash on hand increased by 103% and 40%, respectively, and the cash flow situation was very steady. Deeply cultivate the Anhui market and actively reform and innovate. As a state-owned real estate platform in Hefei, the company vigorously built the “Amber” brand and innovatively proposed the concept of green ecological housing. At the same time as the regional economy is developing rapidly, the company is digging deeper into market potential: in terms of marketing models, it conforms to the characteristics of the Internet economy era and has begun experimenting with online marketing and e-commerce marketing methods; in terms of land reserves, it has for the first time adopted equity acquisitions and cooperative development methods to add land reserves, saving resources for the company's subsequent development. We believe that the company has the potential for high growth in the next three years: first, there are many topics covered by the company, and we expect it to continue to benefit from the fermentation of many concepts such as free trade zones, free trade zones, state-owned enterprise reform, and Disney; second, as a state-owned real estate operation platform and leader in old renovation in Hefei, the company will surely continue to benefit from new urbanization construction in Hefei City and even Anhui Province; third, in the context of the accelerated development of the Hefei real estate market and the acceleration of state-owned enterprise reform, the company is expected to obtain more high-quality projects in Hefei, and thus benefit from the long-term economic and regional real estate market Rapid development. Maintain recommended ratings. The company's NAV9.56 yuan per share is undervalued. EPS for 2014, 2015, and 2016 is expected to be 0.84, 1.1, and 1.44 yuan/share, respectively, and the corresponding PE is 7.58, 5.77, and 4.4 times, respectively, maintaining the recommended rating.